While positive news of debt ceiling talks have helped the United States stock markets to recover, the same cannot be said for the cryptocurrency market. Bitcoin has fallen below the $27,000 support, indicating that buyers are struggling to maintain relief rallies. Institutional investors are booking profits due to macro uncertainty, with $200 million being withdrawn from digital asset investment products in the past four weeks.
Bitcoin support levels for next rally
Despite the short-term negative outlook, Bitcoin’s chart structure remains intact. Although it has corrected 15% from its local high of $31,000, it remains above $25,000, which suggests that the weakness is just a corrective phase in a bull move. The question now is, what are the key support levels that the bulls need to hold to launch the next rally in Bitcoin and altcoins?
Cryptocurrency analysis
Let’s take a look at the charts of the top 10 cryptocurrencies to find out. Bitcoin’s recovery seems to have stalled, with bears selling on rallies, and the sentiment remaining negative. The bears will aim to sink the price below the immediate support at $26,500, and if successful, could open the doors for a decline to $25,250. This level is critical because a break below it may result in a plunge to $20,000.
Ethereum turned down from the 20-day EMA ($1,844), indicating that bears are protecting the level with vigor. The price action has formed a falling wedge pattern, and the ETH/USDT pair could slide to the support line, which is an important level to watch out for.
BNB turned down from the 20-day EMA ($316) on May 15, indicating that bears are active at higher levels. Sellers will try to pull the price to the strong support at $300, and if they succeed, the BNB/USDT pair could extend the decline to $280.
XRP broke above the overhead resistance on May 16, and the bulls continued buying, pushing the price above the 20-day EMA ($0.44) on May 17. However, the long wick on the day’s candlestick shows that bears are selling the relief rallies to the downtrend line, indicating that the XRP/USDT pair may oscillate between the downtrend line and $0.40 for some time.
Other cryptocurrencies
Cardano has been fiercely defended by bears at the $0.38 resistance level, with sellers aiming to pull the price below the uptrend line. Dogecoin is finding buyers at $0.07, but the failure to achieve a strong bounce suggests that demand dries up at higher levels.
Polygon has been stuck in a narrow range between $0.82 and $0.88, indicating indecision among buyers and sellers, with bears in control. Solana remains stuck between the downtrend line and the horizontal support at $19.85, with tight-range trading unlikely to continue for long.
Polkadot has been consolidating near the crucial support of $5.15, with the failure to start a strong rebound suggesting a lack of aggressive buying at current levels. Finally, Litecoin has broken above the 20-day EMA ($85) and is nearing $96, where the bears are expected to mount a strong defense.